Australia government spending rises in third quarter, adds to GDP

(Reuters) – Australian government spending posted another solid rise in the September quarter as a host of fiscal stimulus programmes supported incomes and employment in the wake of nation-wide coronavirus lockdowns.

Spending on operational items rose 1.4% in the third quarter from the previous quarter to an inflation-adjusted A$103.79 billion ($76.37 billion), the Australian Bureau of Statistics reported on Tuesday.

Investment in fixed assets by the government and public enterprises rose 0.3% to A$25.62 billion.

The ABS said the 1.2% increase in total public sector demand was expected to contribute 0.3 percentage points to real gross domestic product (GDP) in the quarter.

Public spending accounts usually for around 24% of GDP, data for which are due on Wednesday. Analysts forecast GDP rebounded by around 2.5% in the third quarter, partially recovering the previous quarter’s huge 7.0% decline.